US Healthcare Exam 1

What is primary care?

First point of contact between a patient and the health care system, preventative care, basic illness, family med, internal med, peds, gyno

What is secondary care?

provided at request of the PCP for more in depth investigation, injury, brief but serious illness, cardiology, oncology, derm, nuero

What is tertiary care?

superspecialists, often via referral from primary care or speciality care for complex, high intensity, serious illness, ex. congestive heart failure dr

What is a premium?

Pay monthly, gets you access to care, employers, employees, and individuals pay

What are taxes?

50% of healthcare paid for by this, state or federal, government programs, medicare, medicaid, veterans admin, indian health service

What is out-of-pocket costs?

Dollars you pay at the visit when you use the care, both insured and uninsured individuals, low in medicaid programs

What is financing?

How the money gets into the system, done by emplyers, government, self-funding

What is the delivery?

Providers (physicians, hospitals, nursing homes, etc)

What are the three parts of the three legged stool?

Access, cost, quality

What is access?

access to health insurance and to health care, to measure how well a state/country is doing, mostly regarding insurance - has to do with language barriers, living in rural areas, lack of drs

What is cost?

price of overall health care system. for government, employers, consumers

What is quality?

Health status that results from health care services provided, if you go to the doctor and improve health status

What is the current state of the US health care system?

High costs, unequal access, average quality, fusion of market justice and social justice, acute care, multiple players and balance of power

How does the US compare to other countries?

Less population covered, spend more money on healthcare, lower life expectancy, more infant and maternal deaths (less quality)

What are the American beliefs and values?

Advancement of science, champion of capitalism, free enterprise and distrust of government, concern for the underprivileged, self-determination

How does the government and health care work together?

Constitution states “promotes general welfare” but not really through health, congress enacted legislature covering drug labeling, environmental protection, etc. everything else is given to the states (health care and health insurance)

What is federalism?

a system of government with both a central authority and autonomous constituent jurisdictions (with state power), arose from the desire to reconcile two powerful opposing forces (need for more national authority and the mistrust of a single sovereign

What does the national government have power in?

Declaring wars, maintaining armed forces, regulating trade, admitting states, coining money, establishing foreign policy, etc.

What does the state government have power in?

Establish and maintain schools, local governments, marriage laws, provide public safety

What do the national and state governments share?

Maintaining la and order, levy taxes, borrow money, charter banks, establish courts, public welfare

What did healthcare look like in the pre-industrial era?

Medicine was insignificant, medical practice is disarray, seen as a trade not profession, primitive medical procedures (bleeding control, purgatives, mercury), no hospitals, much less demand, no education for it

What did healthcare look like in post-industrial era?

Physicians gained sovereignty and resisted national health care

How did urbanization help transform healthcare?

People were distanced from their families, women entered the workforce, physicians were less expensive, physicians productivity and income increase

How did technology help transform healthcare?

Lay people could no longer deliver specialized services, increased demand for professional services (because the care was working), overemphasis on technology begins, cultural authority

What were ground breaking medical discoveries in the post-industrial era?

Discovery of penicillin, vaccines, sanitation techniques, anethesia

How did institutionalization help transform healthcare?

Pooling of resources (in hospitals x-rays, nurses, drs), hospitals expand and develop relationships with physicians, expansion of surgery meant physicians needed hospitals

How did help transform healthcare?

Patients rely on physicians judgement and assistance, increased demand for professional services, patients could only access certain services or medicines with permission of physicians

How did autonomy and organization help transform healthcare?

American medical association organized to resist control by any party, AMA established in 1847 to advance “professionalism, prestige, and financial well-being of its members (so physicians could make the money they wanted to make)

How did licensing help transform healthcare?

Became a function of the states, relieved the intense competition in medical practice, fewer physicians were licensed

How did educational reform help transform healthcare?

In 1893, needed a college degree to enter medical school, in 1910, Flexner report reformed medical education, lab and science courses were needed, medical education involved graduate training (residency), AMA gained control over medical education

What was the Flexner Report?

A look at the quality of medical education, went and examined schools, partially responsible for low number of black physicians, only 66 medical schools remained in the US

What is licensing?

Formal recognition by a regulatory agency (state levels) that a person or institution meets the qualifications to practice that profession or meets minimum standards to operate in their state

What is certification for physicians?

To specialize, may seek it in addition to their medical degree, generally administered by national boards that specify the education, training, competency, and examination requirements, 87% of US physicians are board certified (signals to consumer you are up to date on the things in their field)

What is certification for institutions?

Hospitals seek this from the Joint commission every 3 years which allows them to serve medicare and medicaid patients, they often want to do this because lots of the population is under medicare/medicaid so they are able to serve more patients, since the government is paying for their care, they want to make sure they are getting quality care

What is accreditation?

Recognition by an independent professional organization that a healthcare entity has met predetermined standards

What are the two types of physicians?

Allopathic (MD - acute care), Osteopathic (DO - preventative care)

What are the differences between generalists and specialists?

Training (generalists: less education post med school, pay: generalists make less, generalists have a better work-life balance, specialists have more power)

What is HRSA?

They track individual provider shortages and can label a place with a shortage area and physicians can go work there for more pay or loan forgiveness

What is a HPSA?

Health professional shortage area, typically isolated places, low-income, homeless populations, based on population vs. how many physicians working, ex. correctional facilities, state mental hospitals

What are auto HPSA areas?

Federally qualified health centers, Indian health centers and hospitals, rural health clinics

Why is there a lack of access?

Balanced Budget Act in 1997 capped the number of residency slots with few efforts made by congress or states to increase the numbers, very expensive and the slots are funded mainly by medicare

What did congress and the states do to increase numbers of match slots?

Small increases for rural hospitals, redistribution of unused slots to rural and primary care

What are non-physician providers?

Physicians associates, nurse practitioners, certified nurse midwives

What was the expansion of hospitals?

Late 1800s to mid 1980s, advances in medical science, development of specialized technology, advances in medical education, development of professional nursing, growth of health insurance, role of government

What was the Hospital Survey and Construction Act of 1946 (Hill-Burton act)?

Federal grants given to states for generating new hospital beds, goal was 4.5 beds per 1,000 population, increased supply of beds and small, rural communities could have hospitals, caused costs to explode

What does the distribution of hospitals look like?

About ¼ are for-profit, a little over half are nonprofit, and the remaining are government

What are the expectations for nonprofit hospitals?

IRS grants tax-exempt status but they must provide a defined public good and not distribute profits to individuals (extra money goes back into the community and hospital), regulated by the government

What part of the three-legged stool does insurance fall under?

Access

What is the evolution of healthcare insurance in the 20th century?

Medical care was paid for on a fee-for-service basis and poor people were given charity care/reduced fees, during the depression people couldn’t afford to pay for hospital bills, Baylor hospital contracted with teachers to provide them hospital days (Blue cross), Blue shield becomes pursued by state medical societies to reimburse patients for their payments, 1939 first blue shield plan established in CA, 1940-1950 first hospital insurance (Blue cross) grew, 1974 merger of blue cross and blue shield in NY

What is the purpose of health insurance?

Provide protection from financial loss due to health care costs, redistribute resources from healthy people to sick people, even the sicker people can get insurance, healthy people help subsidize sick people

What are features of US health insurance?

Mostly private with public coverage for select populations, most private insurance is employer-based financed by tax subsidy to employers who offer, and tax subsidized to employees as well (you get taxed on salary but not on money you spend on health insurance), public insurance is financed by federal and state government

What are the differences in offers for health insurance?

Large firms offer insurance (more plans potentially), smaller firms offer less, small companies don’t always have the capital to pay it

How do companies differ in choice of plan?

More likely to get a choice in a large firm because there are so many people who live different lives they need to cover their bases, smaller businesses typically have one or very few plans

What are the benefits offered?

ACA requires most small group and all individual plans to have the 10 essential health benefits

1. Ambulatory patient services (primary care, not hospital)

2. Emergency services

3. Hospitalization

4. Mental health and substance abuse disorders/behavioral health treatment

5. Maternity and newborn care

6. Prescription drugs

7. rehabilitative and habilitative services/devices

8. Lab services

9. Preventative and wellness services and chronic disease management

10. Pediatric services, oral and vision

What is a deductible?

What you must pay out-of-pocket before insurance kicks in

What is a co-payment?

What you pay out of pocket at doctor’s after the deductible is hit, usually flat dollar amount, NOT percentage, not the same for ER, PCP, specialist

What is co-insurance?

Percentage of the bill you pay, harder to know what it is gonna cost, most plans 20%

What is cost-sharing?

Sharing cost with the insurance company of (co-payment, co-insurance, deductible)

What is an out-of-pocket maxiumum?

When you paid all the deductible, co-pay, co-insurance, and add it all up, everything becomes free

What are the two types of regulatory oversight?

State and Federal regulation

What does state regulation cover?

Fully insured market, state insurance laws

What does the fully insured market consist of?

Small groups, large groups, individuals

What does the federal regulation cover?

Self insured market, employers of all sizes

What is a fully insured plan?

Insurance takes the risk not the employer, employers pay premium to a state licensed health insurer and the insurer assumes the risk for the cost of providing medical benefits to the plans enrollees, employer pays percent of the premium and employee pays the rest, smaller companies do this

What is a self-insured plan?

Employer assumes the risk, works better for larger companies, employer pays the actual medical costs of the employees, employees still pay monthly and the company uses that money to pay off people’s medical claims, employer can purchase reinsurance to protect some assets

Why do employers self-insure?

Provide uniform benefits across states if they have people working in different states, better control over cash flow, they can implement wellness strategies, free from state mandates and state laws

What are state mandates?

Expensive, requirements set by states for particular services (ex. IVF, treatment for autism)

What is private insurance and the individual market?

individual/non-group/marketplace, people who are not offered employer coverage and not eligible for public programs can purchase their own insurance, 6 week open enrollment period in which you can enroll so people don’t just enroll when they need insurance and then pull out

What did the ACA do with private insurance?

Subsidizes people between 100-400% of the federal poverty level, people above 400% pay the entire premium, insurance companies can only charge different premiums for people based on age, geography, family size, type of plan, and smoking status

What are the tiered plans?

Platinum, gold, silver, bronze, subsidies are tied to the second lowest cost Silver plan in the state, people between 100-4-00% pay a percent of income

What are strengths of employer sponsored insurance (ESI)?

Subsidized, you may get better insurance than you would normally get on your own, pooling of risk (if you are older this is a strength)

What are weaknesses of ESI?

There can be little choice in plans, somewhat regressive as lower income people in business pay the same premium and out-of-pocket as wealthier people

What is a nuance of deductibles?

Plans have family and individual deductibles, and in and out of network deductibles

What is managed care?

Integrates the function on insurance, delivery of care, and payment, and exercises formal control over utilization

What was is like with non-managed care?

Insurance companies were a passive payer of claims, assumption that the patient and provider were using health care services appropriately, insurance companies had no responsibility for quality of care, or prices charged, incentives rewarded providers for doing more - treating acute illness and use of higher cost services

What are characteristics of managed care?

Arrangements with providers to provide services to members (contracted, services they will cover), explicit standards for selection of providers (not just anyone can join their networks), formal programs for quality assurance and utilization review, financial incentives for members to use providers and services in network, techniques to assure appropriateness of care (gatekeeper - PCP providing referrals, case management, utilization review - how many resources is the provider providing)

What are utilization monitering and control methods?

1. Choice restriction - only certain providers are in network

2. Care coordination - if you have a complex condition that requires multiple physicians

3. Disease management

4. Pharmaceutical management - list of meds you have access to, cost sharing to make you more likely to pick the generic brand

5. utilization review - prospective (gatekeeper, pre auths, before you get care, why would they do the procedure), concurrent (used for hospital stays, already in hospital and need to increase length of stay), retrospective (after services have been delivered)

   1. Practice profiling - can include utilization but also patient satisfaction, comparison to norms and guidelines

What are HMOs?

health maintenance organizations, to keep people healthy, group model - HMO contracts with a multi-speciality medical group, medical group has a facility with most providers, staff model - physicians are salaried employees of the HMO, one stop shop for patients, the insurance company hires the physicians, independent practice association model - independent providers who organize and contract with HMO, different locations but all under one group, gives patients more choice

Describe the current HMO.

Closed network (care outside network is not covered), patients typically must select a PCP, people do not like having to go to a primary care first before a specialist, EPO (exclusive provider organization) doesn’t require you to see primary care first

Describe current PPO (preferred provider organization).

Use of preferred network has lower cost sharing but you can go out of network, PCP not typically required, more co-insurance/higher premiums, in-network physicians paid a discounted fee-for-service but see more patients

What are the types of reimbursement in managed care?

Discounted fee-for-service (FFS) - in-network providers bill and get paid a discounted fee for every service provided, the risk stays with the insurer because they have the sum of money and if you use a lot of care, they could not have the money

Capitation - a per member per month fee is paid by the insurer to the provider in lieu of payment for each service, all risk is with the provider, they have a lump sum now, their motivation is changed to keep their patients healthy so they don’t have to use the money, makes for more flexibility

Salaries - often coupled with withholds/bonuses, some risk on the providers, maybe not getting paid their entire salaries and at the end of the year either given a bonus or the withheld money

What is the most restrictive and least costly premium organization?

HMO (health maintenance organization)

What is the least restrictive and most costly monthly premium organization?

Indemnity/traditional

What are the benfits to managed care?

Efficiency and cost containment, practice guidelines were established for clinicians, potential for more preventive care as it could reduce costs in the long term, better coordination across providers, better data and info on care/quality

What are some challenges of managed care?

Too much bureaucracy, lengthy appeals process for service denials, loss of control by providers, incentives to provide less care (with capitation, pre auths, etc.)

What are the impacts of managed care on cost?

Containment was successful, reduced the rate of growth of health care spending, more restrictions were needed to sustain this impact over time

What were the impacts of managed care on access?

Some evidence of better preventive care and mental health care access, concerns about access for some services by Medicaid patients (being denied services because of small networks)

What were the impacts of managed care on quality?

Some positive results but roughly pretty equal quality

What was the backlash seen with managed care?

Patients lost freedom of choice with providers, people didn’t see the reduction in cost but the employer and government did, physicians lost autonomy, Federal government passed the 1996 Newborns’ and Mothers’ health protection act, states responded with laws

What is consumer directed health care?

A high deductible plan paired with a tax-preferred savings account only used for health services, employee must pay until deductible is reached

What is an HSA (health savings account)?

Employer or employee contributes, must be enrolled in IRS approved plan

What is an HRA (Health reimbursement arrangement)?

Only the employer contributes, can be matched with any plan, not your money, if you move jobs you lose the benefit

What are the trade offs of consumer directed health care?

Lower premiums = higher deductibles and cost sharing

What are the goals of consumer directed health care?

Employee engages more with their health and health care, receives incentives for using or engaging in activities thought to lower health expenses

Who are the opponents to consumer directed health care?

lower income and chronically ill are not served well, relatively small segment of population uses most health care, employers are just cost shifting to employees

Who are the proponents to consumer directed health care?

Gives consumer (patient) more financial incentive to take control of their health, could lead to lower cost and higher quality health care system, CDHC plans are less expensive so more people can be covered

What percent of the population is covered by medicaid?

17%

How much of health care spending does medicaid finance?

1/5 which is a lot

When did medicaid start and how did it work?

1995, through amendment of social security act, the original program was a health coverage supplement for those who were receiving welfare assistance, expanded eventually, serves about 80 million people as of 2024

What is the program design of medicaid?

Jointly financed and administered by federal and state governments, there are mandatory and optional service and coverage groups, states have some flexibility to set eligibility, benefits, and establish payment designs, very little cost sharing